Payment innovation: How the public sector can modernize tax collection

How can new payment methods be adopted by the public sector, generating positive impacts on tax collection controls and processes? This question guided the master’s thesis research of Elaine Yoko, a student on the Professional Master’s in Public Administration Program at Fundação Getulio Vargas’ Brazilian School of Public and Business Administration (FGV EBAPE). She set out to ascertain how new payment forms are being adopted by the public sector and how these innovations are affecting tax collection processes.

According to the researcher, society is currently going through a revolution in payment possibilities and the public sector also needs to modernize and adopt available technologies in order to reduce bureaucracy and help improve the business environment.

There are now various payment means that can be used to modernize tax collection, reducing costs and speeding up processes such as customs clearance, the release of cargo at checkpoints and the issuance of payment certificates to taxpayers.

“So far, innovations in payment methods have mainly focused on the private sector, but there is great potential for the public sector to also adopt these new options,” Yoko says.

Read on to see the full interview:

The subject of your research revolves around “How new payment methods can be adopted by the public sector, impacting tax collection controls and processes.” Could you tell us more about your research project?

The evolution of payment methods has generated significant changes in the world economy, bringing about agility and reducing operating costs. My project set out to ascertain how new forms of payment are being adopted by the public sector and how these innovations are affecting tax collection processes.

What were your research objectives?

The main objective was to investigate how tax management can evolve by adopting modern digital payment systems offered on the market, in order to remodel processes, seeking simplicity and efficiency in the delivery of public services.

What did you find in your research?

So far, innovations in payment methods have mainly focused on the private sector, but there is great potential for the public sector to also adopt these new options, like the Pix instant payment system, and to benefit from advantages such as ease of use, immediacy and widespread accessibility when it comes to paying taxes.

What motivated you to talk about this subject?

The latest editions of the World Bank’s Doing Business report have shown that Brazil is one of the worst countries in the world in which to do business, due to the time it takes companies to declare and pay their tax obligations. The modernization of tax collection can help reduce bureaucracy in the way taxpayers comply with their obligations, improving the local business environment.

Do you have a professional connection with this subject?

Yes, I’m a tax auditor for the state of Rio de Janeiro and I represent Rio on the National Fiscal Policy Council’s Tax Revenue Working Group.

Why did you decide to do a master’s degree at FGV EBAPE?

Doing a master’s at a renowned institution like FGV was a long-held dream, as I wanted to dive deeper into my studies, refine my critical thinking skills and develop professionally. This was made possible by the partnership between FGV EBAPE and the Rio de Janeiro State Finance Secretariat, which arranged a special program for civil servants.

What are the advantages of studying at the school?

Taking the professional master’s program at FGV EBAPE is a unique opportunity to have access to the best professors in the field, as well as modern and welcoming facilities that are conducive to study. You are constantly encouraged to get the most out of the academic world in its entirety, carrying out research, going to seminars and taking part in high-level international experiences, which are only possible thanks to FGV’s partnerships with international institutions.

Click here to find out more about the course

This article is part of our Transformative Ideas series.

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